America’s Demographic Future

In all of the polarizing debate about immigration in America today, little regard is paid to the huge impact of immigration on business and the economy. This piece by Joel Kotkin published in the AgUrban newsletter illuminates the issue. –RexAmerica’s Demographic FutureJoel Kotkin is an internationally-recognized authority on global, economic, political and social trends, and we have followed him from our early days of researching for Boomtown USA – The 7 ½ Keys to Big Success in Small Towns. A recent piece by Mr. Kotkin, America’s Demographic Future, appeared in The Cato Journal. The entire article is a great read, but we wanted to share some points with our readers.

– … immigration may prove more important in the future than in the past. The three key elements behind this assessment are the global demographic slowdown, globalization of the world economy, and challenges to our own long-term economic and social sustainability. Immigration represents a key factor in determining whether the United States can avoid long-term stagnation and maintain its leadership role in the world economy. Overall we should be less concerned about too many newcomers than with the consequences of drastically reduced rates of immigration

– Overall what author Phil Longman (2010) calls a “gray tsunami” will be sweeping the planet, with more than half of all of the population growth coming from the number of people over 60 while only 6 percent will be from people under 30. The battle of the future, including in the developing world, will be to maintain large enough workforces required for the economic growth needed to care for the elderly (Longman 2011).

– Today, among the major countries in the world, only the United States produces enough children to reach near replacement-a case of what demographer Eberstadt (2010) calls “demographic exceptionalism.”

– …it is widely believed America’s workforce will continue to grow even as that of Japan, Europe, Korea, and eventually even China will start to shrink. Between 2000 and 2050, for example, the U.S. workforce is projected to grow by over 40 percent, while that of China shrinks by 10 percent, the EU by 25 percent and, most remarkably, Japan’s by over 40 percent (U.S. Census Bureau International Database).

– In public perception and in many state legislatures there has been a growing sense that the United States receives far too many immigrants. That view is particularly understandable during a period of deep economic pessimism and wrenching change. Yet in reality, under current conditions, the problem may soon be too little as opposed to too much immigration.

– The current economic crisis in the United States has contributed to the decision of Mexicans to stay in their country. That decision is particularly connected to troubles in housing and construction, industries that have been major sources of employment to both legal and illegal immigrants (Mataconis 2011

– Over time that trend could create a labor shortage, notes John Skrentny, director of the Center for Comparative Immigration Studies at the University of California San Diego (Aguilera 2011). Already 40 states, reported in the last census, have fewer children than in 2000. Those that did not, such as Texas, can attribute much of their growth to immigrants and their offspring. “The new engines of growth in America’s population are Hispanics, Asians and other minorities,” notes demographer Bill Frey (Yen 2011).

– Such well-educated and entrepreneurial newcomers constitute a unique asset in a shifting global economy that relies on skilled workers and is increasingly tied to developing countries. Even today, the United States is by far the largest recipient of educated immigrants from these countries and attracts twice as many foreign students as any other country, with nearly two out of three coming from Asia (Docquier and Marfouk 2004).

– Keeping a large portion of these immigrants should be a national goal and should not be difficult-given a proactive immigration policy, opportunities for advancement, better housing, political freedoms, and economic growth. Over the past two decades no country has proven as successful as the United States in retaining skilled foreign immigrants (Flora 2006; Sum, Harrington, and Khatiwada 2006; Anderson 2006).

– The immigrant role in creating new business has been particularly critical during the current recession. According to a recent Kauffman Foundation report, the foreign-born were the one bright spot in the otherwise shell-shocked U.S. entrepreneurial sector. Overall, immigrants have boosted their share of new entrepreneurs from 13.4 percent in 1996 to nearly 30 percent in 2010 (Reedy 2011).

– Given their contributions to our overall economic and demographic vitality, the current downturn in U.S. immigration should be a major concern to American policymakers. Although steps to curb illegal immigration may well be justified, the United States needs to start devising policies that encourage legal immigrants to come here and stay. This is particularly true for skilled and entrepreneurial newcomers.

– Our great genius as a country has been in our ability to integrate newcomers culturally as well as economically. Within a generation or two the overwhelming majority of Latinos lose their primary allegiance to their mother country and 97 percent consider America their home country (Winograd and Hais 2008: 95; Preston 2007b). They also embrace English-only 7 percent of second-generation Californian Latinos speak Spanish as their primary language (Hakimzadeh and Cohen 2007, Preston 2007a). Latinos also represent a growing portion of the U.S. military, hardly a sign of disaffection from the national culture (Rodriguez 2004, Porter 2002).

Mr. Kotkin concludes his article with the following: A rational immigration policy would work against a scenario of rapid aging, stagnant population growth, labor shortages, and declining entrepreneurship, which are likely to afflict Europe and Asia. By remaining the world’s leading immigrant country, America would assure its future as the world’s beacon of liberty and prosperity.

Jack Schultz is the CEO of Agracel Inc., an industrial development firm majoring in rural America, and author ofBoomtown USA – The 7 1/2 Keys to Big Success in Small Towns.The Agurban is a free newsletter distributed each week to community and economic development professionals throughout the United States. Permission is hereby granted to forward, print, circulate, or quote with credit to The Agurban and Jack Schultz. If you enjoy The Agurban, please feel free to share it with other economic and community development professionals.Read past Agurbans at Agurban Archives.
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